The U.S. housing market is defying expectations of a crash this year as limited inventory and high demand keep prices high.
That is according to Fannie Mae economists, who predicted in a revised forecast that home prices will fall at a slower rate than previously anticipated later this year.
The government-backed mortgage giant estimated that home prices will only decline by 1.2% in 2023 and 2.2% the following year – a marked improvement from February, when it predicted that prices would tumble 4.2% this year and another 2.3% in 2023.
“Current housing market dynamics continue to be fueled by the lack of existing homes available for sale, a trend that did not improve during the spring homebuying season, when more homes are typically put on the market,” the Fannie Mae economists wrote in the analysis. “This has supported a return to home price growth in recent months and continued to boost new home construction.”
Although the Federal Reserve’s 15-month-long interest-rate hike campaign sent mortgage rates soaring above 7% for the first time in nearly two decades, home prices have hardly budged. That is at least in part due to a lack of available homes for sale.
Sellers who locked in a low mortgage rate before the pandemic began have been reluctant to sell, leaving few options for eager would-be buyers.
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Source: www.foxbusiness.com
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